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Finweek - English

Finweek - English 10/8/2020

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Finweek is South Africa’s leading financial weekly magazine focusing on investment. With its brisk, creative and authoritative analysis of business and investment issues, it’s an essential business tool in the daily battle for competitive advantage. Today's business decision-makers have to cope with increased pressure on their time and are expected, more than ever before, to succeed in the face of stiffer competition. Finweek provides relevant information in quick bytes, along with award-winning investment advice.

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South Africa
Media 24 Ltd
25 Issues

in this issue

2 min.
from the editor

recently, while watching a documentary on the Roman Empire, I was reminded of the origin of the term “milestone”. One of the key elements to the success of their empire was to connect it by building roads. They placed stone pillars called “obelisks” along these roadways, typically as mile markers. Milestones then. On 25 September, South Africa hit day 183 of the Covid-19-induced lockdown. The official six-month mark. Beyond the lockdown “milestone” of half a year, the end of September also ushered in the fourth quarter of this annus horribilis – with plenty of data being released to illustrate the impact this pandemic has had on our economy. But, as lockdown measures ease and we seem to be maintaining a nearly 90% recovery rate as we enter summer, there is a sense…

4 min.
how to spot a financial bubble

one of the most influential mathematicians of all time, Sir Isaac Newton, lost a fortune by investing in the South Sea Bubble of 1720. When asked why, with all his mathematical prowess, he could not foresee the collapse of the stock, he is reputed to have said that ‘he could not calculate the madness of the people’. And who can blame him for being unable to understand the seemingly irrational behaviour of hundreds or thousands or, sometimes, millions of people – the madness of crowds, as the journalist Charles Mackay coined the phrase in an 1841 bestseller on financial bubbles. Mackay’s nineteenth century interpretation for why bubbles occur is still how most of us would explain the spectacular and seemingly inexorable rise of asset prices during a bubble. Think of the…

4 min.
a potent cure for xenophobia

when economic growth grounded to a halt in the aftermath of the global recession in 2009, competition for scarce resources intensified between South Africans and immigrants, contributing to the resentment of the latter, who are often accused of stealing jobs from the locals. This resentment sparks sporadic xenophobic attacks, some of which have been deadly and resulted in the displacement of foreign nationals. These attacks, which occurred in 2008, 2015, and 2019, are more pronounced in poor communities who live in squatter camps, townships, and the inner cities. These communities are usually plagued by high unemployment, poverty, crime, corruption, and inept service delivery. However, in recent months the anti-immigrant sentiment has reared its ugly head again, this time spreading to sections of society not normally associated with xenophobia. The popular Twitter account…

4 min.
in brief

“THE EDGARS BUSINESS STARTED SHIFTING TOO NICHE AND, ULTIMATELY, IT TOOK THE BIG-BOX RETAILER FURTHER AND FURTHER AWAY FROM THE AVERAGE SOUTH AFRICAN.” − Norman Drieselmann, CEO of retailer Retailability, which closed a deal to acquire 130 of 194 Edgars stores. In an interview with Reuters he explained the plans are to reposition Edgars as a mass market brand, retailing fashion and beauty products, and to exit its homeware division. This new strategy will entail getting the right balance between private labels and international brands that have recognition in the local market and have the right value proposition, he said. “I DIDN’T KNOW.” − Mosebenzi Zwane, former MEC for housing in the Free State, said he didn’t know that the Housing Act existed, and he never read it. Zwane was testifying before the…

1 min.
double take

THE GOOD The minister of mineral resources and energy, Gwede Mantashe, has gazetted approval to add new electricity generation to the national grid. The country is currently facing a power supply crisis and the expeditious procurement of energy into the national grid is critical to support economic recovery. He said Eskom will buy at least 6 800MW of solar and wind power from independent power producers from 2022. The publication of the energy allocations paves the way for opening of a long-awaited round five of the bid window, under the government’s delayed Renewable Energy Independent Power Producers Procurement Programme. THE BAD SAA Technical, a subsidiary of the national carrier that provides critical maintenance services, including inspections required before a flight can take off, said in a letter that it had taken the decision…

4 min.
tackling the housing and rental affordability gap

jSE-listed Balwin Properties is no stranger to developing large sectional title estates. But its next project, Mooikloof Mega City, is on a scale rarely seen. In what could be the world’s largest sectional title development, with a value of around R44bn, the colossal inclusionary housing project located east of Pretoria could count a total of 50 000 apartments. Asked how confident he is the 50 000-figure will be met, Balwin Properties CEO Steve Brookes replies: “100%.” Mooikloof Mega City, a green-model development supported by government as a strategic integrated project, has been designed specifically for the gap housing market. It means housing opportunities for people earning a combined monthly income between R3 501 and R18 000. These income earners earn too much to get a free house from government and too little to…